No-par vs Par Stock [Video]

Here’s what it means for a business to engage in good tax planning:Avoid income recognition by generating tax-exempt income.Defer income recognition by postponing the sale of assets, doing a 1031 exchange.Maximize deductions by keeping receipts for business meals, using a portion of your home exclusively for business (home office deduction).Accelerate deductions by using § 179 expensing, bonus depreciation, cost segregation.Maximize tax credits by hiring individuals who face obstacles finding a job (work opportunity tax credit). You can also reduce your effective tax rate by:• Shifting income from high-tax jurisdictions to low-tax jurisdictions • Shifting income from high-bracket taxpayers to low-bracket taxpayers• Shifting income from high-bracket tax years to low-bracket tax years• Converting ordinary income to capital gains• And avoiding double taxation— Edspira is the creation of Michael McLaughlin, an award-winning professor who went from teenage homelessness to a PhD. Edspira’s mission is to make a high-quality business education accessible to all people. — SUBSCRIBE FOR FREE PDF GUIDES TO THE FINANCIAL STATEMENTS, MANAGERIAL ACCOUNTING, TAX, AND MORE* http://eepurl.com/dIaa5z — HIRE MICHAEL MCLAUGHLIN, PHD, CPA* https://michaelmclaughlin.com/hire-me— GET CERTIFIED IN FINANCIAL STATEMENT ANALYSIS, IFRS 16, AND ASSET-LIABILITY MANAGEMENT* https://edspira.thinkific.com—LISTEN TO THE SCHEME PODCAST * Apple Podcasts: https://podcasts.apple.com/us/podcast/scheme/id1522352725* Spotify: https://open.spotify.com/show/4WaNTqVFxISHlgcSWNT1kc* Website: https://www.edspira.com/podcast-2/—GET TAX TIPS ON TIKTOK* https://www.tiktok.com/@prof_mclaughlin—ACCESS INDEX OF VIDEOS* https://www.edspira.com/index—CONNECT WITH EDSPIRA * Facebook: https://www.facebook.com/Edspira* Instagram: https://www.instagram.com/edspiradotcom* LinkedIn: https://www.linkedin.com/company/edspira—CONNECT WITH MICHAEL * Twitter: https://www.twitter.com/Prof_McLaughlin* LinkedIn: https://www.linkedin.com/in/prof-michael-mclaughlin—ABOUT EDSPIRA AND ITS CREATOR* https://www.edspira.com/about/

In this tutorial, we'll go over the finer details of Operating Leverage, including its meaning, formula and step-by-step calculations. After that, we will use the Colgate Case Study to compute Operating Leverage and interpret the results. You can download the Colgate Operating Leverage template from this link - https://www.wallstreetmojo.com/ratio-analysis-template/What is Operating Leverage?--------------------------------------------Operating leverage is an accounting metric that assists analysts in analyzing how a company's operations are related to its revenues. Moreover, the ratio details how much of an increase in operating profit the company will have with a specific percentage increase in sales – emphasizing the predictability of sales.Formula--------------------------------------------Degree of Operating Leverage Formula = % change in EBIT / % change in Sales.Interpretation--------------------------------------------- Lower Operating Leverage means higher variable costs and lower fixed costs. In this situation, abusiness must generate a minimum level of sales to pay its fixed costs. It can earn additional profit in terms of Selling Price minus Variable Cost until it achieves the break-even point, where all of its fixed costs are covered.- Lower variable expenses and higher fixed costs are associated with higher operating leverage. Thebreak-even point will be higher in this case since the fixed costs are higher. The benefit is that once the break-even point is reached, the company will be able to earn a greater profit on each product because the variable cost is low.For more details, you can refer to our article - https://www.wallstreetmojo.com/operating-leverage/Connect with us!YouTube https://www.youtube.com/channel/UChlNXSK2tC9SJ2Fhhb2kOUwLinkedIn https://www.linkedin.com/company/wallstreetmojo/mycompany/Facebook https://www.facebook.com/wallstreetmojoInstagram https://www.instagram.com/wallstreetmojoofficial/?utm_medium=copy_linkTwitter https://twitter.com/wallstreetmojo

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